A Measure of Monopoly Power, the Percentage Markup of Price

question 77

Multiple Choice

A measure of monopoly power, the percentage markup of price over marginal cost (P-MC) /P is called:

• A)The Inverse Elasticity Pricing Rule
• B)Lerner Index of market power
• C)Monopoly Midpoint Rule
• D)Market Power Rule

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Definitions:

Margin of Safety

The difference between actual or expected sales and the sales level at which a business breaks even; it measures operational risk.

Unit Sales Price

The amount of money charged for each individual unit of a product or service.